Earl Peel: My Lords, does the Minister not agree with me that the Government could do more to discourage the imports of food coming into this country, such as meat, which is produced at standards way below those imposed on our own farmers? Also, the current abuse by which food coming into the country is processed over here and labelled as being British should cease. Both those items would help considerably in boosting the hard-pressed rural economy.

Lord Rooker: My Lords, we are using every means at our disposal in the sense that discussions take place, the position has been made clear and there has been no change in the recent past. It is our intention to have the Assembly up and running before the 24 November deadline approved by the House. That requires devolution and Ministers to take up their posts. The latest IMC report makes it clear in paragraph 219 that,
	"We believe the leadership"—
	of the Provisional IRA—
	"has accepted the need to engage in policing".
	It is a positive statement. There are moves under way, but we have not yet reached the final point at which Sinn Fein is prepared to make the move. It will have to make that move in the end, because there can be no future without that.

Gaza: Electricity Supply

Energy Review

Viscount Astor: My Lords, in moving this amendment, I speak also to Amendment No. 6. These two amendments were grouped with an amendment which was passed by a narrow majority of two votes on Report. Following that, I should have formally moved them on Report. Through the excitement of winning a vote, and oversight, I did not. The Minister has kindly allowed me to move them today, and accept that they were grouped.
	However, I understand that, since Report, he has been able to consider the principle of the amendments and may have something to say about their suitability for the Bill. I beg to move.

Lord Davies of Oldham: My Lords, scarcely would this important issue of additionality have been grouped with any other because, if anything, this was the one that vexed us the most in Committee and on Report. It is quite clear that there is a general view on both sides of the House about the principle of additionality. There is also general agreement that it is right that lottery distributors should report annually on the way in which they have interpreted the principle. We all regard the lottery as separate from, and additional to, government expenditure used for the good of the community, not a substitution for it. The principle underwrote the 1993 Act, and it underpins the Bill.
	On Report, the noble Lord, Lord Clement-Jones, tabled an amendment to include such reporting in the Bill because he was concerned about the issue. We opposed that amendment, but not because we disagreed with the sentiments being expressed. I hope the noble Lord accepted my assurances then. We support the idea of transparency, and we endorsed the voluntary agreement reached by the lottery distributors, but the Government could not accept the amendment as it was worded, particularly the section on funding for not-for-profit organisations, which, as I pointed out, would be very difficult, if not impossible, for distributors to meet.
	The noble Lord, Lord Clement-Jones, was kind enough to withdraw his amendment on the ground that the Government would table their own to enshrine additionality reporting, which was the objective of his amendment and his argument, in a way in which the lottery distributors would find acceptable. That is what this amendment does. It is very important to get the wording right and we believe that the terms of the amendment can be met by the distributors and will allow proper transparency of their actions.
	It is important to remember that this amendment constitutes a reporting requirement. It is not a definition and does not attempt to set out what lottery distributors can or cannot fund. I think that we have agreed on all sides of the House that it would be wrong to try to define additionality. Decisions on what to fund remain for lottery distributors and I am sure that the whole House will agree with that. If Parliament has reason to take issue with reports from distributors, there will be opportunities to debate that. As I pointed out previously, the fact that lottery funding is additional to government funding does not mean that it may not be complementary to such funding.
	We have also pointed out that agreement on what is appropriate for the government to fund can change over time. Just because something is not funded now does not mean that that will always be the case. For example, some things which the lottery has in the past funded are now funded by government and would probably not even be considered by the lottery as being right to fund in future.
	I am sure that noble Lords have thought of many examples, but MRI scanners are the obvious one. Early MRI scanners were first funded through charitable donations and people and hospitals working hard in their localities. Then the lottery funded scanners. It is now recognised that that is an obligation on the health service. It would be a strange government who would suggest that the funding of MRI scanners should be appropriate for lottery funds.
	The funding of MRI scanners demonstrates changing patterns of expenditure, and that something else for which there is a need or desire now may be funded by the Government in the future. There have certainly been cases in the arts and heritage where the lottery has met immediate needs, with much public debate following such decisions. The argument has been that at some stage it ought to be right for the Government to take responsibility for such funding. We are bound to have a constant debate over areas which the lottery appropriately funds to meet needs which the Government are not at the time prepared to meet, but that is not say that the debate will not change. In due course, it will become a charge on the public purse through public resources, because the argument about the importance of such funding has been won.
	To sum up, the amendment will enshrine in legislation the requirement for lottery distributors to report annually on how they have interpreted additionality in their funding decisions so that this guarantees transparency, while allowing—I think that the whole House would recognise this—proper freedom and flexibility in funding decisions.
	We have had a substantial debate about additionality, which has brought together all sides of the House on its complexity and on the care that the Government must take in this legislation to ensure that distributors have proper freedom and that we do not pre-empt lottery decisions. I hope that it will be recognised that the Government have tabled an amendment which meets that requirement and that noble Lords will feel able to support it. I beg to move.

Viscount Astor: My Lords, this has been a joint effort on this subject between the noble Lord, Lord Clement-Jones, and myself. I echo what he said about the Minister and the way that he has helped us through this Bill, which has been extremely helpful. We have been able to come to a sensible conclusion. The Government have always said that they accepted the principle of additionality. The problem is that almost everyone else realised that over time it had been broken in a number of instances. However, the Minister has been helpful because the new clause will help to stop any further abuses. It will give much-needed transparency in this area and the obligation to report is extremely helpful. No doubt all those who think that that principle was coming under pressure will be satisfied.
	The Minister said that this is not a definition of additionality, but he may have created one, because his amendment mentions projects for which funds would be unlikely to be made available by a government department. Maybe that is a new definition of additionality. To me it sounds like the normal advice one received when one went to see the Treasury asking for money for a particular department.

Lord Brooke of Sutton Mandeville: My Lords, the remarks I made about Killarney apply to this amendment as much as to the previous one. In particular, in appreciation of the kind words uttered by the Minister about my absence on that occasion, perhaps I should stress that I was there for the meeting of the British-Irish Interparliamentary Body rather than for any other frivolous reasons.
	As on the London Olympics Bill, where the Minister was extremely helpful from Second Reading, I concur with the noble Lord, Lord Clement-Jones, that he has been equally understanding on this occasion, although it has taken him a little longer. However, we are extremely appreciative. He will recall that we indicated at Second Reading that the Government in 1993 had thrown down the challenge to the Opposition to produce a better definition of "additionality" than was contained in the original Bill. The Minister threw back that challenge to us late at night in his winding-up speech at Second Reading and said that it was up to the Opposition to meet the challenge. However, he accepted the spirit if not the letter of the various attempts which the Opposition made and has now, with great skill, come up with the final solution. That is much appreciated.
	In the 1997 Parliament, there was a Member of Parliament whose election to the House of Commons was challenged on the grounds of their election expenses. I am afraid that the jury found against the Member of Parliament concerned, but the Member of Parliament was reprieved by the noble Baroness, Lady Boothroyd, on the grounds that their dismissal from the House of Commons would effectively have been on a technicality. The Member of Parliament never came to be known in the House by the soubriquet "Technicality Jones", though had they lingered longer, they might have been. However, they left the House. As with Capability Brown, who would have inspired Technicality Jones, there has to be possibility that, despite the Minister's skill, he will still go down in parliamentary history as Additionality Davies. I hope that he will treat it as the compliment that all of us intend.

Lord Grocott: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Company Law Reform Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Lord Hodgson of Astley Abbotts: My Lords, in moving the amendment, I shall speak also to Amendments Nos. 2 to 6 and19 to 26. When this issue was raised on Report on 9 May, the Minister agreed to consider the execution of documents by company secretaries. Since then, the Minister has been kind enough to send a letter to us, stating that the Government are, in fact, inclined to go further than we asked and to allow execution of documents by a "named other person". Sadly, as the letter then says, it has not proved possible to produce the amendments in time for the proceedings of this House, which is indeed a pity, but we are pleased that the Government are in a receptive mode and grateful for that further assurance from the Minister. Indeed, Amendments Nos. 5 and 6 in this group, amending Clause 44 on the execution of documents, take that proposal a stage further.
	However, we still harbour some concerns that the Government do not seem to have fully appreciated the thrusts of our amendments in Committee and on Report. The execution of documents point that they have agreed to consider was only part of our argument. The bigger picture was about the empowerment of company secretaries where they are not legally required; that is, secretaries who private companies choose to have even though the law does not oblige it. That is why we have tabled a further group this afternoon. The position of such secretaries under the Bill as currently drafted is unclear. There are no requirements for them to be registered, nor to be fit for their role; there are none of the requirements that secretaries of public companies must fulfil.
	We do not argue with the deregulatory intent behind that approach, which is obviously aimed at easing the burden on smaller companies, but it has a number of drawbacks. The lack of any requirement for the registration of secretaries will leave those that still exist in limbo, with no official recognition of their status. For example, how will an outsider to the company know, or be able to check, that such a person is a company secretary? The role is, currently, one that helps encourage the spread of good corporate governance; yet, by removing the need for any registration and denying them any legal status, the Government have cut the ground from under the feet of all secretaries of private companies, no matter how large.
	Now, we agree that many companies welcome the removal of the need to have a secretary and the Bill will result in a decreased regulatory burden for them. Yet, there will remain some private companies, especially the larger ones, for whom a secretary adds value. Those companies who want to keep a person in that role should not then see the legal status of that secretary eroded or weakened. The Government seem, to us, to have missed that point and we now ask them to reconsider it. The amendment will impose no burdens on those companies that choose not to have a secretary, which will be unaffected. It will give strength to those companies which wish to preserve the status quo by keeping a secretary, probably because they believe that such a person adds value to their corporate governance processes. In that spirit, I beg to move.

Lord Sainsbury of Turville: My Lords, the Bill abolishes the requirement for private companies to appoint a company secretary. This is a major deregulatory measure. The Company Law Review recommended that as, it argued, the decision on whether to use the services of a secretary should be made by the market rather than by law. Removing the requirement to appoint a company secretary does not prevent a private company appointing one; it leaves the decision entirely to the company, giving it the freedom to choose. If it chooses not to appoint a secretary, the approach of the Bill is that the appointment is not subject to any regulatory requirements. If, on the other hand, the company chooses to appoint a secretary, the company is completely free to decide what its secretary's function will be.
	The Bill, as drafted, gives greater flexibility to companies in their internal administrative arrangements. For example, some companies might choose to appoint someone as secretary just for peak periods, with the director or directors doing whatever else was necessary between times. To require such a company to notify the registrar of the appointment and its termination each time, and to keep a register of such short-term appointments, would be over-burdensome. Surely, the only justification for imposing such a burden would be if the information is genuinely needed by third parties. At present, third parties only ever need that information when the secretary is participating in the execution of documents. That is why it is sensible to discuss together the amendments relating to a company secretary's details being on the public record and those relating to the execution of documents.
	There are four questions that need to be addressed with this group of amendments. First, who should be able to execute documents for a company? Secondly, and related to the first, if private companies appoint a secretary, should that secretary be able to participate in the execution of documents for the company? Thirdly, should the details of any secretary voluntarily appointed by a private company be on the public record? Fourthly, and finally, if private companies appoint a secretary, should the directors be under an express duty, imposed by the Bill, to secure that the secretary is a person who appears to them to have the requisite knowledge and experience to discharge the functions of a secretary?
	I shall address these questions in that order, although not in the order of their appearance in the Bill. First, who should be able to execute documents for a company? At present, for any company executing documents, the alternative provided under the law of England and Wales to affixing its common seal is execution by signature of either two directors or a director and the secretary. Importantly, these two signatures can be made at different times and places. As many noble Lords have pointed out, this flexibility can be very useful to companies. Yet this flexibility will not be available under the Bill as presently drafted, particularly for those private companies that have only one director. Neither does the new provision introduced by the Bill, that a director may execute a document in the presence of a witness, wholly solve the problem, because the witness must be present at the moment the director places his signature. We accept that this is a weakness.
	As indicated on Report, we therefore propose to implement the recommendation made to us by the Law Society and the City of London Law Society that the Bill provisions which set out who is able to execute a document for a company should be less restrictive than either under the present law or as in the Bill as presently drafted. Instead, every company is to be able to designate whoever it chooses to execute documents for it, but only if it so wishes. This new option will be entirely voluntary. There will not be a requirement on any company to use this new facility and companies will be able to designate as many individuals in this capacity as they wish, provided that they are an individual who is 16 or over.
	Directors and public company secretaries will remain able to execute documents, by virtue of their office. Any designated signatories will be in addition to them. It is expected that many private companies that choose to appoint secretaries will want to give the role as a designated signatory to their secretaries, but this may not always be the case and it is not to be a requirement. We are also considering whether transitional provisions for existing secretaries of private companies should be made, automatically designating them for this role, at the first instance. So we are looking at the question of the transitional arrangements. There will need to be a public record of designated signatories for the benefit of third parties with whom the company deals. We are consulting over draft amendments to implement this proposal with a view to introducing amendments to this effect in another place. I will place a copy of the consultation letter in the Library.
	The second issue is, if private companies appoint a secretary, should that secretary automatically be able to participate in the execution of documents for the company? In company law there is a distinction between private companies and public companies, even though many private companies are big by any measure, whether number of shareholders, turnover, capitalisation, or whatever. Similarly, many public companies are small. The crucial difference between private and public is not a matter of size but a matter of governance and ownership. That is why we have argued, for example, that it makes sense for the requirement to have a company secretary to adopt this criterion. That is not to say that big private companies may not benefit from having a secretary and giving that secretary a particular role and function within the company. Rather, it is to say that in a private company, all decisions, including whether to have a secretary or not, and what functions to give any secretary appointed, should be left to the company alone—in other words, to those who will be directly affected by the decision. This should include the decision as to whether the secretary can execute documents.
	My third question is whether private companies' secretaries should be on the public record. The purpose of the public record is to ensure that those who deal with the company know who has the necessary authority. But the Bill and the present law make this a real issue only in relation to secretaries with regard to execution of documents. In the case of private companies, it is therefore considered be an unnecessary and over-burdensome regulation to require entries on a company register and the notification requirements to the registrar, with the associated criminal offences, in the case of anyone except those able to execute documents. Details of all such persons must be on the public record, so that third parties can check and see. Under our proposals, when a private company has a secretary who is authorised to sign for it, that individual's particulars will need to be on the public record; if not, then not.
	I accept that if private company secretaries, as the amendments propose, are automatically to be able to execute documents, their details ought to be on the public record. Where I take issue with the noble Lord is that it should be provided that private company secretaries should automatically be able to execute documents. I consider this a decision that should be left to the company, even though I expect that the vast majority of private companies that appoint a secretary will choose to designate them to execute documents.
	The fourth point that arises under the proposed amendments in this group is, when a private company has chosen to appoint a secretary, whether the directors of that company should be subject to a new duty to secure that the secretary appears to them to have the requisite knowledge and experience to carry out the role. This would extend the extent to which the present law regulates the position of private company secretaries, rather than deregulate it, as we are proposing to do in this Bill following on from the Company Law Review recommendations. We would be going in exactly the other direction and increasing regulation. For the reasons expressed earlier, there are differences in approach to the governance and regulation of private companies, and in my view this proposal would lead only to unwarranted and unnecessary further regulation.
	I regret that it has not been possible to table amendments that would provide that companies may designate one or more individuals who would be able to be signatories for the execution of documents under Clause 44 and who may authenticate under Clause 48. There are complications, to which I alluded earlier. But in the light of our clear intentions, I hope that the noble Lord will feel able to withdraw his amendments on the issues he has raised in this group.

Lord Hodgson of Astley Abbotts: My Lords, the whole House will be grateful to the Minister for the amendments he has tabled. As he says, there is a delicate balance to be struck between shareholder democracy and shareholder tyranny. On these Benches we welcome these changes, which are clearly an important and worthwhile step in the right direction. Events involving GlaxoSmithKline have given them urgency. We have not yet had much time to study them or to think through their implications. That will probably be for debate in the other place, during Committee stage. We wonder whether further tightening up will be needed as consultation takes place.
	Three thoughts have occurred to us, which I offer to the Minister this afternoon. First, we have not heard the end of the issue of proper purpose and the definition thereof. If a company—particularly in the early months and years of the legislation without any court guidance on what the court thinks is proper or improper—has to go to the trouble and expense of going to court, there must be a risk that, because of the time, money and the risk to reputation of going to court and being turned down, it will be inclined to hand over the register rather than go through that hurdle. The "not a proper purpose" issue will have to be further probed as consultation takes place.
	The second question is whether the amendments prevent the chain request; that is where I persuade someone who is perfectly legitimate to use a legitimate purpose to get the register for someone else. Therefore, will there be a proper trace back to the person who is improper, even if the sequences in the chain are perfectly proper? The last thought is whether there is an alternative route that might provide a more effective way of preventing this situation in the Data Protection Act or equivalent legislation, which would achieve the purpose that we entirely share in a way that shuts off the issue more completely than it is possible to do in what is, after all, a company law reform Bill.
	Those are our thoughts, on which I hope the Minister may be able to give some preliminary comments. For the time being, from these Benches, we welcome the Government's prompt attention to this important matter and entirely support the amendments.

Lord Razzall: My Lords, I share the thanks of the Conservative Benches to the Government for having brought forward the amendments. I have a couple of points to make. First, there should be no doubt about the seriousness of the issue that the amendments are attempting to address. Anyone who heard the chief executive of GlaxoSmithKline on the radio the other day will have taken heed of his warning that there is a danger that significant chemical and scientific research will be exported outside the United Kingdom if the actions of extremists continue. He even suggested that those decisions were already being taken by multinational companies, so it is in the interests of UK plc that the Government get this right.
	It was slightly unfortunate that the chief executive went on to say that he did not think that any change in the law was necessary. Although he was making the technical point that the Minister also made that existing statutes could be used to prosecute such people, he gave the impression that this was not a serious issue requiring a change of the law, which does not reflect the Government's position. I share the Government's concern.
	Secondly, we had 13 days in the Moses Room in Committee on this Bill, which are forever etched in our memories, and we had three days on Report. However, because of the events triggered by GlaxoSmithKline, the Government are being forced at this very late stage of the Bill to bring forward these amendments for the first time. What would have happened had this process started at the beginning of the Bill? This is no criticism of anyone; this is just what has been provoked by recent events. Had this come at the beginning of the Bill, the Conservative and Liberal Democrat opposition and the Government would have had the benefit of extensive consultation and input from all those people who have given us input on all sides, which has enabled this Bill to be significantly improved as it has passed through its various stages.
	I just hope that when the Bill goes to another place, the Government will take heed of the fact that that consultation exercise will probably need to take place without the benefit of the two experts sitting on the Government Front Bench here. The other place does not have a serious record of imposing detailed scrutiny on these sorts of points in technical Bills of this kind, so I urge the Minister to impress on his colleagues in another place that, when the Bill goes into Committee, they should concentrate on the clauses that have not received the detailed scrutiny given to some other clauses in the Bill.

Lord Jenkin of Roding: My Lords, I apologise profusely for not being here at the start of the debate. I want to express my thanks to those who have been briefing me on the question, and to say that the Government have made a fair attempt at trying to deal with this problem. I have studied Amendment No. 8, which seems to me to meet the case. The court will no doubt be able to decide what is or is not "a proper purpose". It has probably already been said, and I apologise, but this needs to be examined carefully, and I hope that the Minister will not rule out the possibility of amendments being moved in another place.

Lord Freeman: In moving Amendment No. 11 in my name and that of my noble friend Lord Hodgson of Astley Abbotts, I shall also speak to Amendments Nos. 12 and 13.
	The purpose of Amendment No. 11 is to enable the articles of a company to authorise a matter that would otherwise give rise to a breach of duty under the clause in so far as it is permitted by law. The matter has been raised by the Law Society, and there have been constructive discussions for which I am very grateful. I shall therefore be briefer than I would otherwise be because I am anticipating government Amendments Nos. 14 and 15.
	On Report, we tabled an amendment to the then Clause 159(4) that was designed to enable the company's articles of association to authorise a matter that otherwise would constitute a conflict of interest, provided it did not contravene a common law rule or equitable principle. The noble and learned Lord the Attorney-General said on Report at col. 866 that the Government would consider the general point made at that stage.
	The amendment to Clause 158(4) is narrower, but it is again designed to achieve a similar objective by enabling a company's articles of association to authorise a matter which otherwise would constitute a conflict of interest provided that it is lawful.
	On Report, the Minister acknowledged that this was a difficult area. He also acknowledged that because old Clauses 159 and 160 characterised the obligations contained in those clauses as duties, the analysis in the Movitex case, to which the noble and learned Lord the Attorney-General referred, might no longer be available. The Minister objected to our amendment on Report because in his view it appeared to permit the company's constitution to provide a very wide exemption from liability, with the result that the only limits when it would not be possible to exempt directors' liability would be when actual fraud or dishonesty were involved.
	However, the Minister stated that the point raised was one that ought to be considered and that the Government would consider it further before Third Reading. On that basis the amendment was withdrawn. I note government Amendments Nos. 14 and 15, to which the Minister will speak shortly. I ask him to confirm my understanding that those amendments refer to new Clauses 158 and 159. I beg to move.

Amendment, by leave, withdrawn.
	Clause 220 [Protected Information]:

Lord Jenkin of Roding: My Lords, I am very grateful that the noble Lord has taken the point made in an amendment that I moved on Report. There is a related problem that I hope may be addressed: if a director of a company that is likely to be targeted by animal terrorists is also a director of other companies, they are obliged to disclose his address unless the court has made an order. Terrorists could get hold of a director's address through that avenue. Can a director of an entirely independent company apply to the court for his address to be withheld? Many people are directors of a number of companies and are all the more valuable for it. Can a director say that he does not want his address to be disclosed, not because of anything that that company may be doing—it may have nothing to do with animal research—but to prevent harassment and intimidation of him via his family? Will that be open to a director in the circumstances that I have envisaged?

Lord Freeman: My Lords, I join my noble friend Lord Jenkin in congratulating the Government on bringing forward this amendment. Perhaps I may put down a marker with the Minister. I raised a point in Committee and on Report which is, as yet, unanswered and to which my noble friend Lord Jenkin now refers. I should be grateful if the Government could give it further consideration. It is a procedural matter but an important one. There may well be a small number of circumstances in which the current address of a director who has protection under a current filing could be discovered in passed filings. His address could be discovered because those applying for information from Companies House can simply apply for the disclosure of a current address from other filings. I accept that this is a technical matter but it could be an important issue. It is not impossible for the registrar at Companies House to expunge previous records, both on microfiche and paper filings. I ask the Government to continue to consider that point.

Lord Hodgson of Astley Abbotts: My Lords, Amendment No. 18 brings us to Part 11, whether permission be given. This is concerned with derivative claims, an issue which has given rise to a great deal of concern and about which we have had lengthy debates. We are very grateful to the Government for the important changes that they made to Part 11 at Report stage. They went a long way towards easing concerns on this issue. However, there are still misgivings over the effect that the enactment of this part will have if left as drafted. One should not underestimate the impact of possible threats under this part on the readiness of people to serve as non-executive directors.
	Amendment No. 18 inserts into Clause 243(3) a clear provision requiring a court, in considering whether to give permission to continue a derivative claim, to take into account,
	"whether any alternative remedy is available to the member".
	That is not clear from the Bill as drafted.
	In its report, Shareholder Remedies, published in 1997, the Law Commission, referring to the case of Barrett v Duckett—1995 1 BCLC 243—recommended that the court should take into account the availability of alternative remedies. Consistently with that recommendation, it included as a factor for a court to take into account whether a remedy is available as an alternative to a derivative claim.
	In the context of contributory winding up petitions, it has long been held that "alternative remedy" is not confined to an alternative cause of action available to the petitioner, but includes a fair offer to buy the petitioner's shares. That was the situation in Re a Company in 1983, Re a Company in 1987 and Re Cyracuse Ltd in 2001. An alternative remedy has also always been a potential bar to a derivative action, as in the case of Barrett v Duckett where the alternative remedy on which the court relied was a liquidation offered by the defendant, which the claimant opposed; in other words, this was an alternative means provided by the defendant for the claimant to receive a fair value for her shares. The policy behind this approach is that it would be wrong for the claimant or petitioner to continue with proceedings that will affect shareholders generally if his grievance can be met in some other way, which may include receiving a fair value for his shares. Whether this is an answer to his grievance on the facts of a particular case will be a matter for the court to decide in the exercise of its discretion.
	Clause 243, "whether permission to be given", as it stands, does not incorporate this recommendation of the Law Commission. Clause 243(3)(f), as it now stands, partly addresses the point, but imposes a limit on the concept of alternative remedy by confining it to an alternative cause of action that a member could pursue in his own right. We cannot see any good policy reason for confining the concept of alternative remedy in this way. Nor is the point satisfactorily addressed by Clause 243(3)(a) which requires the court to take into account whether the member is acting in good faith since the requirement of good faith for a claimant in a derivative action has always been treated as a separate hurdle from that imposed by the availability of an alternative remedy. Our amendment would give effect to the Law Commission's recommendation and would finally achieve a fair and proper balance in this very difficult area. I beg to move.

Lord Sainsbury of Turville: My Lords, my noble and learned friend the Attorney-General has said that the provisions relating to derivative claims in Part 11 of the Bill have their origin in the Law Commission's 1997 report on shareholder remedies. I readily acknowledge this and also acknowledge the argument that this amendment reflects a Law Commission recommendation, although I have to say that I am not wholly persuaded that it is what it intended. Either way, as noble Lords opposite have frequently reminded us, we have to consider proposals on their merits in the context of today.
	There are two important reasons why we cannot support this amendment. In the first place, it seems to us that an offer to buy the petitioner's shares is not an appropriate remedy in the circumstances of a derivative claim. Such a remedy derives from provisions relating to winding-up, and it is a perfectly fair and reasonable remedy in that context where some members want the business to continue and others do not. However, we are dealing here with claims which are brought in the name of the company against a director for breach of duty. The court may in due course find that the director has been negligent or has put his own interests ahead of those of the company. In such circumstances, we believe that the appropriate remedy would be one of the usual consequences of breach of duty, such as damages or compensation where the company has suffered loss or restoration of the company's property. It is the company that has suffered as the result of the director's breach of duty and we therefore do not believe that the court should be required to take account of an alternative remedy available essentially between the members, such as an offer to buy the petitioner's shares.
	Secondly, we do not think that the proposed amendment is in the interests of companies or of their shareholders as a whole. Noble Lords have in previous debates in this House rightly drawn attention to the activities of vulture funds. Their arrival is a new element that needs to be taken into account. We believe that there is a strong possibility that the insertion of this additional factor in the list of matters of which the court must take account might encourage such funds to tell companies that they must either buy them out or face a possible derivative claim. In short, we fear that it would be open to abuse.
	I hope that the noble Lord, Lord Hodgson, will be willing to withdraw his amendment in the light of these concerns. In inviting him to do so, I put on record again our gratitude to all those who have commented on the clauses in this important part of the Bill and have helped to ensure that we have got the balance right.

Lord Hodgson of Astley Abbotts: My Lords, in moving Amendment No. 29, I also speak to Amendments Nos. 32 to 38, by which we seek to strike out 10 clauses from this already overlong Bill. The amendments would remove the new provisions in the Bill relating to members' powers to require an independent report on a poll. We discussed this issue, too, in Grand Committee and on Report. Each time, we asked the Government a number of questions, which frankly still remain unanswered. The first question is: what mischief are the provisions supposed to remedy? The Minister justified them by saying that they were there because of a recommendation by the company law review. He went on to say:
	"The problem they were seeking to put right was a lack of confidence in the integrity and effectiveness of the voting processes in quoted companies. Their"—
	that is, the company law review's—
	"objective was to deal with what was perceived to be a problem in registering voting instructions".—[Official Report, 9/5/06; col. 896.]
	My understanding of that reply is that no mischief needs remedying. The problem is a perceived one, as the Minister himself put it. We have not heard a single example or been given any evidence of cases where there has been an actual problem. We would therefore say that introducing these clumsy and burdensome requirements is an over-reaction. Surely there are less expensive and less restrictive ways of challenging this perception than by forcing this type of burden on all public companies.
	A second unanswered question is: what value will these provisions add? Again, the Minister's reply on Report was that the benefit was improving confidence in investors. He also said:
	"If an independent report found the poll to have been carried out improperly, the chairman's declaration made at the time could still stand. The company would be able to ensure through its articles that this would be the outcome of any report on a poll. What such a report would do, of course, is to put the directors on notice that the company's polling processes needed improving".—[Official Report, 9/5/06; col. 897.]
	It seems to me that, with this response, the Minister has shot his own fox. The report will not, apparently, have sufficient authority to challenge the result of an improperly conducted poll; nor will it require the directors to change procedures. Instead, it will put them "on notice". This seems to be an awfully expensive and time-consuming way of achieving a minor objective. Surely directors will be on notice of any problem, perceived or real, by complaints from shareholders. The directors can authorise an independent poll themselves if the complaints appear to be valid, but to give members the right always to require such a poll is simply asking for abuse by minority interests.
	Finally, the clauses do not reflect the reality of present-day company meetings. Resolutions used to be carried out almost exclusively on the basis of a show of hands, but no longer. Today, polls are increasingly used—a trend that must be expected to intensify in the future. As the noble Lord, Lord Sharman, pointed out in his powerful contribution on Report:
	"It is important to understand that current practice is for most annual general meetings of shareholders to be conducted by poll. This is not something that happened under the 1948 Act or preceding Acts. The notion of a poll under those pieces of legislation was of something that happened when the board was in trouble and not supported by a show of hands".—[Official Report, 9/5/06; col. 895-6.]
	So we are not talking about hypothetical rare cases where polls might be demanded and where an independent assessment might be needed.
	The Minister concluded:
	"These new provisions form part of the Government's wider objective to promote greater transparency and improve shareholder engagement".—[Official Report, 9/5/06; col. 897.]
	We do not disagree with the importance of those objectives, but these clauses do nothing to achieve them. The potential burdens of these provisions far outweigh any possible benefits. The Minister, valiantly though he has tried, has failed to provide a compelling argument for us to support the new provisions in this Bill. I beg to move.

Baroness Northover: My Lords, I rise to speak to Amendments Nos. 39 to 41, which stand in my name and that of my noble friend Lord Razzall. We discussed in Committee and at Report stage the genesis of these amendments. We originally welcomed the DTI's proposal of the OFR as a significant move toward greater corporate transparency and accountability, including in relation to the physical and social environment in which a company works. As the Minister knows, we regretted the Chancellor's commitment in November 2005, in a speech to the CBI, to abandon the OFR. At Report, we welcomed the improvements to the business review, which incorporated a number of the original OFR provisions. However, we feel that the Government have still not gone far enough, and I thank the Trade Justice Movement and CORE for their help in focussing on these extremely important issues.
	Amendments Nos. 39 and 41 seek to expand the number of companies that would have to include information about their impact on the environment, the company's employees and social and community issues in their business review. The Bill currently requires quoted companies to include in their business review assessments of that same information, although it is,
	"to the extent necessary for an understanding of the development, performance or position of the company's business",
	however that might be interpreted.
	Surely, it is right that a larger number of companies—not just those that are publicly quoted—should be required to disclose information on social and community issues and the impact of the company's business on the environment. As highlighted on Report by my noble friend Lord Phillips of Sudbury, many companies responsible for the worst abuses around the world—for example, those named in the OECD report on operations in the DRC—are not publicly quoted companies. It therefore seems appropriate that all companies which have to produce a business review, not just the approximately 1,500 publicly listed companies, should be required to report on the full range of their impacts in a manner consistent with the size and complexity of their business operations.
	These amendments seek to achieve that. Amendment No. 39 would extend the provision beyond listed companies and Amendment No. 41 would extend the provision to include medium-sized businesses to report as is appropriate to their complexity. I would note—and this may need to be addressed in the other place—that with subsection (5), which we welcome as far as it goes, added into Clause 396, there is some overlap between that and subsection (6), leading to a certain lack of clarity about where the additional provisions apply. I mentioned before, on Report, that the Government should produce guidelines about what they have mind; perhaps that should be done, as well as clarifying the clause, when this Bill reaches the other place.
	Amendment No. 40 addresses another area. As well as information on social and environmental issues, an understanding of the treatment of suppliers is pertinent to the understanding of the company's business and the principal risks and uncertainties that it faces. It therefore makes sense that supplier issues—that is to say contractual or other arrangements with individuals that the business is dependent on—should be added to the list of factors on which directors should have to provide information in the business review. We therefore seek to add this.
	In all, these amendments are about transparency, accountability and wider corporate social responsibility. Last night I attended the global business coalition on HIV/AIDS where major companies—Unilever, Merck, Amex and L'Oreal—won awards for what they are doing to help combat AIDS in Africa. They should be commended for that and would, I am sure, be happy to have their track record in these areas in the public domain. This is a chance to spread good practice, and I therefore commend the amendments to the House. I beg to move.

Lord Shutt of Greetland: My Lords, I support my noble friend on this, as there is a very serious issue here. In recent years, there has been this movement of the cult of private equity. We should look at the size of companies and not necessarily at the ownership of companies. Indeed, without this, that cult of private equity could go even further. It is actually a way of avoiding all sorts of regulation that some might think of as onerous but others may well think of as very proper. So looking at the size of company is a far better way in which to look at it than looking at the particular method of ownership.

Lord McKenzie of Luton: My Lords, Clause 479 is one of the small number of new provisions relating to the appointment of auditors. It provides a power to require companies to disclose the terms on which a company engages its auditors. Perhaps I may say how grateful I am to the noble Lord, Lord Sharman, for sending me in confidence a copy of an audit engagement letter. I certainly understand his view that few shareholders would be interested in reading all of it. On the other hand, shareholders are a large and diverse group, and I can imagine that some might be interested in various aspects. Personally, I thought it a good read. Perhaps the noble Lord, Lord Razzall, will pass on to his noble friend Lord Sharman that I am a bit light of holiday reading next week. If there is any more going, he might bear me in mind.
	There was information in the letter that could be of interest to shareholders, particularly if they are shareholders of more than one company, because it gives them a source of comparison. In any case, having considered the arguments of the noble Baroness and the noble Lord at earlier stages, I am happy to accept the amendment so that the power will be subject to affirmative resolution, and so that we can justify bringing it forward in due course.

Baroness Noakes: My Lords, my winning streak might come to an end. In moving Amendment No. 46, I shall speak also to Amendment No. 49. These add two new subsections to Clause 493, the clause which creates for the first time a statutory criminal offence for a particular profession.
	It is often said that hard cases make bad law. With regard to the offence created by Clause 493, there are no cases that have led to this provision, and I do not believe that that is the basis for good law. The Government have adduced only hypothetical examples of auditor behaviour that they seek to penalise by this offence. In the many discussions with those still actively engaged in my former profession, everyone has struggled to work out who in practice the new offence would catch beyond those dealt with in the existing criminal code and the current Fraud Bill.
	Noble Lords might think that this simply means that we will have an ineffective law rather than bad law on the statute book. The trouble is that the Government's chosen weapon of terror to use against those hypothetical auditors in their sights is an offence based on recklessness. I am no lawyer but I know that offences involving recklessness are notoriously difficult to define with precision. The Government know that too, because in Clauses 494 and 495 they have gone to great lengths to ensure that the effect of Clause 493 will be moderated by guidance issued by the Secretary of State. The Government need that guidance because they know that the new offence will play havoc with the professional disciplinary arrangements that exist for auditors. Those who are the guardians of those arrangements have given warning of this.
	The uncertain nature of this offence is likely to lead the auditing profession to retreat into risk-averse and costly audit procedures to provide auditors with as much certainty as possible that they will not fall foul of the new law. This will not be box-ticking, as has occasionally been suggested. It will be additional layers of review and duplication of processes. It will add no value but it will add cost to British industry. As noble Lords will be aware, my preferred solution would be the elimination of Clauses 493 to 495. It remains my hope that the Government will reach that conclusion when the Bill is considered in another place. For today, I am seeking to explore the meaning that the Government intend for the offences set out in Clause 493(1) and (2).
	My Amendment No. 46 introduces a new subsection which says that an offence is not committed under subsection (1) if a person did not know that there was a significant risk that through his deliberate omissions or acts he would cause a misleading, false or deceptive report to be issued. That means that there has to be knowledge and it should be judged subjectively. Amendment No. 49 has a similar effect in relation to the subsection (2) offence.
	In these amendments I am seeking to set out that I understand what the Minister and his officials mean by "recklessly" in the context of Clause 493. I thank the Minister for the helpful meeting that he arranged last week to discuss this. But some in the auditing profession have been advised by counsel in an opinion that I saw only this morning that such a criminal offence will require proof of dishonesty. The Minister appears to think not, as he has said:
	"It has been suggested that changing to 'fraudulently or dishonestly' is the only way of reassuring auditors that they will not be prosecuted for an honest mistake. That is wrong, not because prosecutors would have to prove dishonesty—they would not—but because these offences cannot be committed as a genuine mistake or through negligence".—[Official Report, 10/05/06; cols. 1031-32.]
	The Government say that it will not be necessary to prove dishonesty, and the auditing profession has been advised of the opposite. There is a potentially harmful gulf in understanding.
	The Minister knows that I have no intention of pressing my amendments today, and wish to use the debate to get greater clarity over the Government's intentions. I therefore hope that the Government will say, first, precisely in what ways the formulation in my new subsection departs from the Government's intentions for the clause. If, as the Minister has said at the Dispatch Box, dishonesty will not have to be proved, I hope he will also undertake that further discussions will take place with the auditing profession—possibly also involving the noble and learned Lord the Attorney-General—as to the real meaning of "recklessness" in the Clause 493 offence. The Minister will be aware that the importance of this goes beyond Clause 493, because the Bill is littered with recklessness offences, including those in the amendments that we have just debated.
	Unless Clause 493 is radically changed in another place, I anticipate that the blunderbuss nature of the offence will need to be refined by the guidance anticipated under Clauses 494 and 495. I hope that the Minister will also say something about that guidance: what form it will take, how and when it will be prepared and who will be involved in its preparation. I beg to move.

Lord Razzall: My Lords, I support the comments of the noble Baroness. It is a pity that, as we passed through our period of purdah in the Moses Room and on Report, that we on the Conservative and Liberal Democrat Benches were not able to persuade the Government that there was a problem with "knowingly or recklessly" for the purposes of this clause. As the noble Baroness has indicated, this is important because, if the Government are wrong in their interpretation of the clause, it potentially criminalises negligence by auditors for the first time. It would be the first time a professional individual has been subject to criminal prosecution for negligence where there is no damage to life or limb—there is obviously health and safety legislation, et cetera.
	The difficulty is that the words "knowingly or recklessly" are rather different in common parlance from the way in which they have been interpreted by the courts and the House of Lords. When the Prime Minister went into Iraq, he clearly did it knowingly; he might or might not have done it recklessly; he would certainly argue that he did not do it dishonestly, although others might have taken a different view. Had the question of whether he had knowingly or recklessly gone into Iraq been subject to the interpretation of the top court in our land, the definition would have required him to have been dishonest to have done it knowingly or recklessly, as case law has consistently indicated. The problem, as the noble Baroness indicated, is that, in his remarks on Second Reading, the Minister—presumably speaking from notes provided by his officials—indicated that, in his view, "knowingly or recklessly" in this context went further than the requirement accepted by the House of Lords in endless litigation, which is that to act knowingly or recklessly requires dishonesty.
	Wherever we get to on these amendments—I know that the noble Baroness is not pressing them—it is vital for accountancy practice that the Minister makes clear what the government interpretation of "knowingly or recklessly" is. Does it or does it not require, as up until now the law has required, that definition to include dishonesty?

Viscount Bledisloe: My Lords, with her Amendments Nos. 46 and 49, the noble Baroness, Lady Noakes, obviously and properly intends to increase an auditor's protection against being prosecuted. I entirely agree that Amendment No. 49 is necessary and helpful to protect an auditor. On the other hand, I am worried that Amendment No. 46 in fact weakens subsection (1) rather than strengthening it. This is dependent on how you read subsection (1). The words are,
	"knowingly or recklessly causes a report . . . to include any matter that is misleading, false",
	and so on. One interpretation would be that the only question governed by "knowingly or recklessly" is, "Did he cause that matter to be included?". He did, so is it misleading? If it is, he has committed an offence. I do not think that that is the proper interpretation of this clause, or the interpretation that a court would come to. I think a court would say, "Did he knowingly or recklessly cause the report to include misleading matter?"; that is, did he know or was he reckless as to whether the matter was misleading, not whether it was included. However, I agree that that is open to doubt.
	If the second interpretation, which I prefer, is right, then the amendment of the noble Baroness weakens the clause, because it says that,
	"he did not know that there was a significant risk that through his omissions",
	et cetera. That is much lower than reckless. An amendment to subsection (1) is needed—although I approve of the amendment of the noble Baroness to subsection (2)—saying, "if he is knowing or reckless in causing misleading matter to be included", so that it is quite clear that "knowingly and recklessly" governs the inclusion of misleading matter, not the inclusion of matter which is then found to be objectively misleading.

Lord Sainsbury of Turville: My Lords, the new offences for auditors in Clause 493 are aimed at auditors' responsibility for providing assurance on the reliability of annual accounts, a matter of great significance to the wider economy. The amendments remove from the scope of the new offence in subsection (2) two aspects of the auditor's duties: first, the auditor's duty to make a statement if the company does not keep adequate accounting records; secondly, the statement of shortcomings in the directors' remuneration report.
	Following debates at earlier stages we have considered those aspects and agree that it is inappropriate to apply the criminal offence to either of them. I beg to move.

Lord Sainsbury of Turville: moved Amendments Nos. 54 to 60:
	After Clause 591, insert the following new clause—
	"PART 19A DEBENTURES
	REGISTER OF DEBENTURE HOLDERS
	(1) Any register of debenture holders of a company that is kept by the company must be kept available for inspection—
	(a) at the company's registered office, or
	(b) at another place in the part of the United Kingdom in which the company is registered.
	(2) A company must give notice to the registrar of the place where any such register is kept available for inspection and of any change in that place.
	(3) No such notice is required if the register has, at all times since it came into existence, been kept available for inspection at the company's registered office.
	(4) If a company makes default for 14 days in complying with subsection (2), an offence is committed by—
	(a) the company, and
	(b) every officer of the company who is in default,
	(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and in the case of continued contravention to a daily default fine not exceeding one-tenth of level 3 on the standard scale.
	(6) References in this section to a register of debenture holders include a duplicate—
	(a) of a register of debenture holders that is kept outside the United Kingdom, or
	(b) of any part of such a register."
	After Clause 591, insert the following new clause—
	"REGISTER OF DEBENTURE HOLDERS: RIGHT TO INSPECT AND REQUIRE COPY
	(1) Every register of debenture holders of a company must, except when duly closed, be open to the inspection—
	(a) of the registered holder of any such debentures, or any holder of shares in the company, without charge, and
	(b) of any other person on payment of such fee as may be prescribed.
	(2) Any person may require a copy of the register, or any part of it, on payment of such fee as may be prescribed.
	(3) A person seeking to exercise either of the rights conferred by this section must make a request to the company to that effect.
	(4) The request must contain the following information—
	(a) in the case of an individual, his name and address;
	(b) in the case of an organisation, the name and address of an individual responsible for making the request on behalf of the organisation;
	(c) the purpose for which the information is to be used; and
	(d) whether the information will be disclosed to any other person, and if so—
	(i) where that person is an individual, his name and address,
	(ii) where that person is an organisation, the name and address of an individual responsible for receiving the information on its behalf, and
	(iii) the purpose for which the information is to be used by that person.
	(5) For the purposes of this section a register is "duly closed" if it is closed in accordance with provision contained—
	(a) in the articles or in the debentures,
	(b) in the case of debenture stock in the stock certificates, or
	(c) in the trust deed or other document securing the debentures or debenture stock.
	The total period for which a register is closed in any year must not exceed 30 days.
	(6) References in this section to a register of debenture holders include a duplicate—
	(a) of a register of debenture holders that is kept outside the United Kingdom, or
	(b) of any part of such a register."
	After Clause 591, insert the following new clause—
	"REGISTER OF DEBENTURE HOLDERS: RESPONSE TO REQUEST FOR INSPECTION OR COPY
	(1) Where a company receives a request under section (Register of debenture holders: right to inspect and require copy) (register of debenture holders: right to inspect and require copy), it must within five working days either—
	(a) comply with the request, or
	(b) apply to the court.
	(2) If it applies to the court it must notify the person making the request.
	(3) If on an application under this section the court is satisfied that the inspection or copy is not sought for a proper purpose—
	(a) it shall direct the company not to comply with the request, and
	(b) it may further order that the company's costs (in Scotland, expenses) on the application be paid in whole or in part by the person who made the request, even if he is not a party to the application.
	(4) If the court makes such a direction and it appears to the court that the company is or may be subject to other requests made for a similar purpose (whether made by the same person or different persons), it may direct that the company is not to comply with any such request.
	The order must contain such provision as appears to the court appropriate to identify the requests to which it applies.
	(5) If on an application under this section the court does not direct the company not to comply with the request, the company must comply with the request immediately upon the court giving its decision or, as the case may be, the proceedings being discontinued."
	After Clause 591, insert the following new clause—
	"REGISTER OF DEBENTURE HOLDERS: REFUSAL OF INSPECTION OR DEFAULT IN PROVIDING COPY
	(1) If an inspection required under section (Register of debenture holders: right to inspect and require copy) (register of debenture holders: right to inspect and require copy) is refused or default is made in providing a copy required under that section, otherwise than in accordance with an order of the court, an offence is committed by—
	(a) the company, and
	(b) every officer of the company who is in default.
	(2) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
	(3) In the case of any such refusal or default the court may by order compel an immediate inspection or, as the case may be, direct that the copy required be sent to the person requesting it."
	After Clause 591, insert the following new clause—
	"REGISTER OF DEBENTURE HOLDERS: OFFENCES IN CONNECTION WITH REQUEST FOR OR DISCLOSURE OF INFORMATION
	(1) It is an offence for a person knowingly or recklessly to make in a request under section (Register of debenture holders: right to inspect or require copy) (register of debenture holders: right to inspect or require copy) a statement that is misleading, false or deceptive in a material particular.
	(2) It is an offence for a person in possession of information obtained by exercise of either of the rights conferred by that section—
	(a) to do anything that results in the information being disclosed to another person, or
	(b) to fail to do anything with the result that the information is disclosed to another person,
	knowing or having reason to suspect that person may use the information for a purpose that is not a proper purpose.
	(3) A person guilty of an offence under this section is liable—
	(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
	(b) on summary conviction—
	(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);
	(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both)."
	After Clause 591, insert the following new clause—
	"TIME LIMIT FOR CLAIMS ARISING FROM ENTRY IN REGISTER
	(1) Liability incurred by a company—
	(a) from the making or deletion of an entry in the register of debenture holders, or
	(b) from a failure to make or delete any such entry,
	is not enforceable more than ten years after the date on which the entry was made or deleted or, as the case may be, the failure first occurred.
	(2) This is without prejudice to any lesser period of limitation (and, in Scotland, to any rule that the obligation giving rise to the liability prescribes before the expiry of that period)."
	After Clause 591, insert the following new clause—
	"RIGHT OF DEBENTURE HOLDER TO COPY OF DEED
	(1) Any holder of debentures of a company is entitled, on request and on payment of such fee as may be prescribed, to be provided with a copy of any trust deed for securing the debentures.
	(2) If default is made in complying with this section, an offence is committed by every officer of the company who is in default.
	(3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
	(4) In the case of any such default the court may direct that the copy required be sent to the person requiring it."
	On Question, amendments agreed to.
	Clause 610 [Right to inspect and request copy of entries]:

Lord McKenzie of Luton: My Lords, in moving Amendment No. 67 I shall speak also to the other amendments in the group. With these amendments we turn to the subject of the restoration of companies to the register. Companies can be removed from the register for a number of reasons: for example, when they are wound-up under the Insolvency Act, or because they are struck off by the registrar after failing to provide evidence of their continuing to be in operation; for example, failing to submit annual returns. Companies may also apply voluntarily to be struck off the register when they want to end their own life, and Amendment No. 67 extends this route of voluntary strike-off—which is of course subject to strict conditions—to public as well as private companies.
	Sometimes it is necessary for companies which have been struck off the register to be restored to it. This could be because they were struck off, so to speak, in error in the first place, and they had in fact always continued to operate. On other occasions, even where the company is genuinely defunct, it may be necessary to resurrect it as a legal person so that it can play a part in litigation, for example.
	At the moment there are two different mechanisms in law for applying to restore a company to the register, as set out in Sections 651 and 653 of the Companies Act 1985. Both require application to the court. The Company Law Review looked carefully at this subject and concluded that there was a risk of confusion between the two and that it would be more sensible to provide a single, unified scheme. This is what Amendments Nos. 74 to 78 do.
	In setting out the new single procedure, largely based on that which previously existed under Section 653 of the Companies Act, a few changes of substance have been made. The time limit for applying to the court under the old Section 651 procedure was two years, and under the Section 653 procedure 20 years. The new clause, in line with a Company Law Review recommendation, harmonises the time limit at six years. It does, however, preserve a dispensation from this time limit in cases where an applicant is seeking to revive the company in order to pursue a case for personal injury against it. This is important where, for example, an industrial disease does not become apparent for some time after a company is wound up. Without this dispensation it could be more difficult for a victim to pursue a valid claim.
	The new unified procedure still requires an application to be made to the court, and in many circumstances this is clearly a necessary and appropriate step. However, in some instances the company will have been struck off by the registrar because it appears that the company is no longer in business—for example, because it has failed to submit necessary and timely returns—but in fact the company has continued to operate. If it is clear that the company is in practical terms in continued existence, and if nobody can and does object, then it may be unnecessarily onerous to provide that the only route by which it may be restored to the register is a court order.
	The Company Law Review therefore recommended that a new, administrative procedure be introduced whereby the registrar herself can, in tightly defined circumstances, reinstate a company to the register, and Amendments Nos. 69 to 73 implement this scheme. I believe this provision is fully in line with changes we have made in related areas of the Bill, where we have now provided that, in certain circumstances, the registrar should be able to amend the register without the need for a court order.
	Finally, I should confirm that the Treasury Solicitor (in England, Wales and also Northern Ireland, where the Crown Solicitor acts as the Treasury Solicitor's agent); the Queen's and Lord Treasurer's Remembrancer (in Scotland); or the representatives of the Royal Duchies (as the case may be), will continue to be involved in the court procedure and will also have a role in the new administrative procedure. No company will be restored by the Registrar of Companies without the appropriate representative's consent. Amendment No. 68 makes small changes to the related process by which these interested parties may disclaim bona vacantia—the unclaimed property of a defunct company which would otherwise pass to them. As well as making some consequential changes, Amendment No. 78 includes a change regarding the costs incurred by the various representatives. If a company is restored after its property has been sold off, it must be given the proceeds of sale. The amendment allows the costs of sale to be deducted from the amount handed back to the company. I beg to move.

Baroness Noakes: My Lords, in moving Amendment No. 83 I shall speak also to Amendment No. 83. These amendments have the effect of making the Freedom of Information Act apply to the two bodies to which the Secretary of State will delegate his functions. Amendment No. 82 relates to the independent supervisor and, more importantly, Amendment No. 83 relates to a body that we believe will be the Public Oversight Board.
	Only yesterday, the noble and learned Lord the Lord Chancellor made a speech in which he said that he was proud of the implementation of the Freedom of Information Act. His department issued a report on the progress that has been made in implementation. That showed that while there is still more to do—for example, on the timetable taken to reply to requests—the implementation has, in general, been without problems. However, the Government continue to say that they are still reviewing the implementation of the Act before extending it beyond government departments and the bodies initially included.
	We believe that when a Minister delegates his functions to a body, whether a public sector body or not, it is right that the Freedom of Information Act rights and responsibilities also follow. Put another way, it would be wrong if a government department could avoid the operation of the Act by choosing to delegate functions in a particular way rather than carry them out directly. So as a matter of principle we think that the Act should apply to cases such as the delegation of functions to the independent supervisor and the Public Oversight Board.
	More substantively, we have a very real belief that the performance of audit firms, which will be a function of the Public Oversight Board, ought to be in the public domain. If we are to have confidence in the role of auditors underpinning the strength of our capital markets, it makes no sense at all to keep auditor performance behind the closed doors of the Public Oversight Board.
	As the noble Lord, Lord Sharman, and I have explained in Grand Committee and at Report, audit committees of listed companies bear a big responsibility to oversee the appointment of auditors and their work. How can audit committees discharge that responsibility if important information is kept from them? How can they rationally carry out a tender for an audit if they cannot compare the relative performance of auditors as judged by a knowledgeable external body? These two amendments are in the public interest. I beg to move.

Lord McKenzie of Luton: My Lords, noble Lords have argued that extending the level of public reporting, particularly by the Audit Inspection Unit, might offer a greater level of transparency and decision-useful information to companies and their audit committees on the performance of individual audit firms. During the debate last week on Report, I set out the reasons why the Government, in implementing the recommendations of the Review of the Regulatory Regime of the Accountancy Profession, concluded that Audit Inspection Unit reports on individual audit firms should not be public. At the same time I also acknowledged that there were counter-arguments and I explained that the Public Oversight Board is currently undertaking a review of its approach with a view to consulting more widely.
	Perhaps I may rehearse briefly the arguments against the publication of individual reports. The main concern is that to do so would encourage a rules-driven, litigious approach rather than having the desired effect of creating an inspection regime designed to improve the quality of firms' practice and internal processes through constructive dialogue. In particular, we run the risk of reports becoming more legalistic as the burden of proof required before matters can be made public would arguably increase. The resulting reports would be in danger of becoming anodyne and thus of little real value to audit committees. Ultimately, there must be the risk that such an approach would drive the inspection regime towards a tick-box approach to compliance, which would certainly be undesirable to regulators and companies.
	I have reflected carefully on the noble Lord's point that access to individual reports would help audit committees meet their obligations under the combined code to assess the effectiveness of the external audit. Although I accept that the AIU reports on individual audit firms might be an interesting read for audit committees, I am not persuaded that anything other than an individual report on their particular audit would provide the sort of decision-useful information that the noble Lord perhaps is seeking.
	The concerns and risks that I have outlined again today are important and weighty. Again, however, I do not deny that there are alternative views and I accept that the balance of arguments is one that may be revisited. It is for these reasons that I feel strongly that the right course of action is to allow the Public Oversight Board to conduct a public consultation, as it has committed to do, on extending the level of public reporting, considering precisely what information should be published and when. That is not something that we should decide here. There must be open discussion and debate with all interested parties, in particular with the auditing profession and companies themselves.
	As to whether the Government are shy about the Freedom of Information Act, we introduced that legislation and are proud of it. I caution noble Lords that if the purpose of the amendment is to get the individual audit firm reports out into the open, going down the route of the Freedom of Information Act would not necessarily produce that result. Several exceptions might apply if an FOI request were made for the AIU reports that are currently made only to the firm and the Audit Registration Committee. In particular, Section 43(3) of the Freedom of Information Act provides an exception to the requirements of the Act in cases where the information is prejudicial to a person's commercial interest. Furthermore, the Freedom of Information Act provides an exception for information that is held in order to monitor compliance with the law. In any such case where an exemption applied, the information would be discloseable only if the public interest in maintaining the exemption did not outweigh the public interest in disclosing it.
	I stress again that if the import of the amendment is to try to get more public information about the performance of audit firms, surely the best route is to go through this consultation with the POB so that all those who are engaged in this process can input properly into it. For example, the AIU itself could input on how it might recast its reports so that matters might be brought more fully into the public domain. That is the best route forward on this matter rather than the route of the Freedom of Information Act. That really might not produce the result that the noble Baroness and the noble Lord are seeking.

Lord McKenzie of Luton: My Lords, in moving Amendment No. 84, I shall speak also to the other amendments in the group. I gave an undertaking in the debate on Part 21 on Report last week to table on Third Reading further amendments to Clauses 859 to 861. I shall now set out the detail of these amendments.
	The amendment removes the three clauses that are currently in the Bill, which give power to the competent authority—at present, the Financial Services Authority— to make rules for the purposes of the transparency directive and connected regulatory purposes. The clauses also make provision for the inclusion of a power for the competent authority to make corporate governance rules, and for the Secretary of State to make corporate governance regulations to implement, to enable the implementation of, or to deal with matters arising from or relating to any community obligation.
	The amendment replaces the three clauses with nine new clauses, which recast and supplement the clauses proposed for removal. There are two reasons for this. First, the amendment will ensure that the provision for rule-making in the clauses is clearer. The clauses will fit better with the approach adopted in surrounding provisions in the Financial Services and Markets Act 2000. As part of that, we have incorporated the two amendments proposed by noble Lords in Committee to the definitions of issuer's relevant information and voteholder information respectively.
	Secondly, the amendments include supplementary provisions. The first substantive additions incorporate provisions for additional regulatory powers of the competent authority. These powers are to suspend or prohibit trading of an issuer's shares if there are breaches or suspected breaches of transparency obligations and to censure publicly an issuer who breaches the transparency obligations.
	There is also a supplementary provision to determine how the competent authority is to exercise its enforcement powers where the issue is from another member state. The transparency directive requires member states to have those powers. That is Articles 24.4 and 26. The second addition includes provisions to amend the powers of the Secretary of State in Section 14 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 to appoint a body to oversee accounts and financial reporting functions. That will enable the functions overseen by the Secretary of State's appointed body to extend to the accounts and reports required to be produced by quoted companies in accordance with obligations arising from implementation of the transparency directive. The changes will also provide for the inclusion of a further clause clarifying issuers' liability in relation to disclosures required under the transparency directive. That is part of the implementation of Article 7 of the directive. I beg to move.

Lord Sainsbury of Turville: moved Amendment No. 99:
	Page 491, leave out lines 21 and 22 and insert—
	"address—generally—in the company communications provisions section (Requirement to give service address) section 776(1)"
	On Question, amendment agreed to.

Lord Sainsbury of Turville: moved Amendment No. 100:
	Page 497, leave out line 8.
	On Question, amendment agreed to.

Lord Sainsbury of Turville: moved Amendment No. 101:
	After Schedule 14, insert the following new schedule—
	"TRANSPARENCY OBLIGATIONS AND RELATED MATTERS:CONSEQUENTIAL AMENDMENTS PART 1 AMENDMENTS OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
	1 Part 6 of the Financial Services and Markets Act 2000 (listing and other matters) is amended as follows.
	2 In section 73 (general duty of competent authority), after subsection (1) insert—
	"(1A) To the extent that those general functions are functions under or relating to transparency rules, subsection (1)(c) and (f) have effect as if the references to a regulated market were references to a market."
	3 In section 73A (Part 6 Rules), after subsection (5) insert—
	"(6) Transparency rules and corporate governance rules are not listing rules, disclosure rules or prospectus rules, but are Part 6 rules."
	4 For the cross-heading before section 90 substitute "Compensation for false or misleading statements etc".
	5 For the heading to section 90 substitute "Compensation for statements in listing particulars or prospectus".
	6 (1) Section 91 (penalties for breach of Part 6 rules) is amended as follows.
	(2) For subsection (1) substitute—
	"(1) If the competent authority considers that—
	(a) an issuer of listed securities, or
	(b) an applicant for listing,
	has contravened any provision of listing rules, it may impose on him a penalty of such amount as it considers appropriate.
	(1ZA) If the competent authority considers that—
	(a) an issuer who has requested or approved the admission of a financial instrument to trading on a regulated market,
	(b) a person discharging managerial responsibilities within such an issuer, or
	(c) a person connected with such a person discharging managerial responsibilities,
	has contravened any provision of disclosure rules, it may impose on him a penalty of such amount as it considers appropriate."
	(3) After subsection (1A) insert—
	"(1B) If the competent authority considers—
	(a) that a person has contravened—
	(i) a provision of transparency rules or a provision otherwise made in accordance with the transparency obligations directive, or
	(ii) a provision of corporate governance rules, or
	(b) that a person on whom a requirement has been imposed under section 89J (power to suspend or prohibit trading of securities in case of infringement of applicable transparency obligation), has contravened that requirement,
	it may impose on the person a penalty of such amount as it considers appropriate.".
	(4) In subsection (2) for "(1)(a), (1)(b)(ii) or (1A)" substitute "(1), (1ZA)(a), (1A) or (1B)".
	7 In section 96B (persons discharging managerial responsibilities and connected persons)—
	(a) for the heading substitute "Disclosure rules: persons responsible for compliance";
	(b) in subsection (1) for "For the purposes of this Part" substitute "for the purposes of the provisions of this Part relating to disclosure rules".
	8 In section 97(1) (appointment by the competent authority of persons to carry out investigations), for paragraphs (a) and (b) substitute—
	"(a) there may have been a contravention of—
	(i) a provision of this Part or of Part 6 rules, or
	(ii) a provision otherwise made in accordance with the prospectus directive or the transparency obligations directive;
	(b) a person who was at the material time a director of a person mentioned in section 91(1), (1ZA)(a), (1A) or (1B) has been knowingly concerned in a contravention by that person of—
	(i) a provision of this Part or of Part 6 rules, or
	(ii) a provision otherwise made in accordance with the prospectus directive or the transparency obligations directive;".
	9 In section 99 (fees) after subsection (1B) insert—
	"(1C) Transparency rules may require the payment of fees to the competent authority in respect of the continued admission of financial instruments to trading on a regulated market.".
	10 In section 102A(3) (meaning of "transferable securities") for "the investment services directive" substitute "Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments".
	11 (1) Section 103(1) (interpretation of Part 6) is amended as follows.
	(2) In the definition of "regulated market" for "Article 1.13 of the investment services directive" substitute "Article 4.1(14) of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments".
	(3) At the appropriate place insert—
	""voteholder information" has the meaning given by section 89B(2);".
	PART 2 AMENDMENTS OF THE COMPANIES (AUDIT, INVESTIGATIONS AND COMMUNITY ENTERPRISE) ACT 2004
	12 Chapter 2 of Part 1 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (accounts and reports) is amended as follows.
	13 (1) Section 14 (supervision of periodic accounts and reports of issuers of listed securities) is amended as follows.
	(2) In subsection (2)(a)—
	(a) for "listed" substitute "transferable";
	(b) for "listing" substitute "Part 6".
	(3) In subsection (3)(a)—
	(a) for "listed" substitute "transferable";
	(b) for "listing" substitute "Part 6".
	(4) In subsection (7)(b) for "listed" substitute "transferable".
	(5) In subsection (12)—
	(a) for ""listed securities" and "listing rules" have" substitute ""Part 6 rules" has";
	(b) for the definition of "issuer" substitute—
	""issuer" has the meaning given by section 102A(6);";
	(c) in the definition of "periodic" for "listing" substitute "Part 6";
	(d) at the end add—
	""transferable securities" has the meaning given by section 102A(3) of that Act.".
	14 (1) Section 15 (application of certain company law provisions to bodies appointed under section 14) is amended as follows.
	(2) In subsection (5)(a)—
	(a) for "listed" substitute "transferable";
	(b) for "listing" substitute "Part 6".
	(3) In subsection (5B)(a)—
	(a) for "listed" substitute "transferable";
	(b) for "listing" substitute "Part 6".
	(4) In subsection (6)(b) for ""listing rules" and "security"" substitute ""Part 6 rules" and "transferable securities"".
	On Question, amendment agreed to.
	Schedule 15 [Repeals]:

Lord Rodgers of Quarry Bank: rose to ask Her Majesty's Government what steps they intend to take to ensure the efficiency and effectiveness of the treatment of stroke victims, in light of the report of the Comptroller and Auditor General, Reducing Brain Damage: Faster access to better stroke care (HC 452).
	My Lords, in the early hours of Tuesday 8 May 2001—just five years ago—I was carried by ambulance from my home to the Royal Free Hospital in London, where it was decided that I had suffered a stroke. A few days later, I was moved to the National Hospital in Queen Square.
	I had spent not even one night in hospital in over 50 years. My weight, blood pressure and cholesterol were in order. I did not smoke; I drank moderately, took some exercise and had a careful diet. I had never thought much about health problems or how the body works. Some years earlier, atrial fibrillation had been diagnosed and I settled down to a regime of Warfarin, but that seemed routine in late middle age in order to avoid the possibility of a heart attack.
	I knew of strokes. One had killed Tony Crosland, a friend and cabinet colleague. Yet in my naivety I thought that a cardiac problem and a stroke were wholly detached—one was of the heart, the other of the head. As far as I recall, stroke had never been mentioned by my doctors during my Warfarin years.
	I tell this story because many are innocent, as I was, about stroke, as it has a low profile among diseases, as is clear in the audit report, and because the consequences of stroke can be fatal to the victims, or they can be left severely disabled. I had no physical consequences of my stroke—I was very lucky—but my reading, writing, speaking and comprehension were severely affected. I can still say "questions" when I mean "answers" and "she" instead of "he" and get the wrong preposition, and find it difficult to grasp telephone numbers. But I am immensely grateful for my recovery to the speech and language therapy service of the North Middlesex Hospital, which I attended for two and a half years of speech therapy.
	In passing, I pay tribute to the Stroke Association for its research, welfare and campaigning, and to Different Strokes, a relatively new charity developed by young stroke survivors to support their special needs—and at least 1,000 young people under 30 every year suffer a stroke. I pay tribute too to Speakability, another charity, which cares for patients with special problems and assists their rehabilitation.
	The performance of the Department of Health and the NHS is the key to preventing strokes and handling the consequences, and the recent National Audit Office report gives me serious concern, especially as many hospital trusts are faced with financial deficits. As an example, I refer to the Royal Free Hospital and the Royal Free Hampstead National Health Trust, where I became a patient. I have had correspondence with the Minister of State, Rosie Winterton, in which I asked whether any reductions were being made in the NHS stroke services in England and Wales, given the problems that had arisen from overspending. I understood that her reply was no, but then learned that the Royal Free intended either to close the stroke unit or to reduce its facilities.
	Rosie Winterton now says that the hospital plans,
	"to redesign its stroke services"—
	"redesign" is a familiar euphemism—and to reduce the number of designated stroke services, which seems quite contrary to the advice of the National Audit Office report. She also promised that the chair of the Royal Free Trust would provide me with new information. She wrote to me on 29 April but, three weeks later, I have heard nothing at all from the Royal Free. I would be very grateful to be told what is really happening to the Royal Free, whether it is the case that no cuts are being made in NHS stroke services in England and Wales as a result of overspending, and whether any other changes arising from overspending are consistent with the recommendations of the audit report, as in paragraph 9 of the report's summary, for example.
	I welcome the improvements in stroke services made by the Department of Health over the past few years. I am glad that we now have a dedicated stroke unit in many hospitals and I was delighted to open the new stroke unit in the North Middlesex Hospital last year. I recognise that the Department of Health has a national strategy for the next stage of stroke development, although I am cautious about "strategies"—a buzzword that sometimes avoids or delays necessary action. But overall, given that it is careful, disciplined and restrained, the National Audit Office report is very disturbing. The Public Accounts Committee of the House of Commons goes further; it calls the report "scathing" and "deeply shocking" and says that there have been,
	"shameful lost opportunities and lost lives".
	Over 100,000 strokes occur every year and stroke accounts for 11 per cent of deaths in England and Wales. Between 20 and 30 per cent of people who have a stroke die within a month, and many others suffer moderate or severe disability. In comparison, more than three times as many women die of stroke than of breast cancer. The key findings of the report say that the Department of Health has not given as high a priority to stroke as to other conditions and that an emergency response to stroke, with efficient and effective acute care, is lacking. Services for coronary heart disease have been well established for many years, but stroke services are still in their infancy, revealing disproportionate differences in resources and status. Rapid admission to hospital and access to specialised stroke care, including brain scanning, is vital for ensuring the best possible outcome for patients. For many it is a matter of life and death.
	It is not enough for the Department of Health to say that there have been real improvements over recent years and that it hopes to make further progress. It is urgent now to accept all the recommendations of the audit report and to implement them without delay. I understand that the Public Accounts Committee will report in three or four weeks' time, in the middle of June, but I hope that the Minister can reassure me tonight that the Secretary of State is already acting on the audit report.

Baroness Murphy: My Lords, I add my thanks to the noble Lord, Lord Rodgers, for initiating the debate. I pay tribute to him and to the noble Lord, Lord Clinton-Davis, for giving us the benefit of what it feels like to have had a stroke and for enabling us to hear first hand from people who have survived the experience.
	I declare an interest as a psychiatrist and gerontologist who has treated many stroke patients in the aftermath of their incident, and now as an outgoing chair of a strategic health authority monitoring the implementation of the National Service Framework for Older People.
	First, I acknowledge the recent, if very belated, progress that the Government have made in developing a strategy to improve stroke treatment. There is no doubt that there has been a lot more action recently. We still have no measurable targets, however, such as every stroke patient should have a scan within three hours of their incident to see whether they can benefit from thrombolysis treatment. We are way behind Canada and Australia, and that means lost lives and very significant economic and human disaster for those who would otherwise have been saved. We still monitor mainly service process measures in the national framework, which is regrettably incapable of measuring anything very useful except the "creative writing talents" of PCTs and trusts.
	About two years ago I visited every stroke unit in my own strategic health authority area in east London and found to my dismay that while some were exemplary—Tower Hamlets stroke service is an excellent example of the best—not all services were as advanced by any means, and none was getting every stroke patient in its patch into a specialist unit immediately as a medical emergency. It was pretty hit and miss whether people got specialist care. Many so-called "special stroke units" comprised merely a handful of allocated beds in a general ward, with no dedicated team or specialist staff, just identified persons known to have "an interest" in stroke. Those of us who can interpret NHS lingo will know that that usually means a person who has a major interest in doing something else. The pleasure I had felt at the apparent progress on the paper returns that we received at the SHA, and which I proudly sent on to the department, did not last when I saw the reality in some trusts and PCTs.
	Why has stroke until now not got the attention of other medical emergencies? It is due to ageism. Stroke is seen as an old person's misfortune and an irremediable one at that. While overt age discrimination may be less acceptable than it used to be, there is still thoughtless neglect and passive lack of thought given to older people's disorders. Cardiovascular disease has a separate national framework and a national network but stroke was shoved in with the older people's framework. Stroke demonstrates a serious dilemma in the provision of services for older people. Unless they have access to the same acute diagnostics and treatment as younger people, and unless access is constantly audited to eradicate ageist clinical decision-making, very often they will receive an inferior standard of medical care, often in non-acute geriatric units. Often those units are provided with the best but, in my view, misguided paternalistic intentions. Gerontological practice can get rapidly isolated from the mainstream and stroke care is a good example of how slow we can be in using the existing technological kit properly and in implementing good clinical practice.
	One aspect of the National Audit Office report disappointed me, though. There was reference to emotional and social problems but practically none to the fact that the main long-term outcome of a stroke in terms of social and occupational rehabilitation is the extent of mental health problems, in cognition, perception, emotions, severe depression and other distressing mental symptoms. In this House there are many people with profound physical disabilities. Their presence reminds us that it is your brain that counts, not your muscles, when it comes to contributing to society and maintaining social relationships. With stroke the success of cognitive and emotional rehabilitation determines the eventual level of social reintegration, and whether a person can return home.
	I want especially to mention severe depression after stroke. Between 15 to 20 per cent of stroke patients—depending on which surveys you look at—experience a major depressive illness within two months of the stroke. This usually lasts just under a year. Those who suffer from severe depression are 50 per cent more likely to suffer another stroke than those who do not. You hear people say, "Well, they would be depressed wouldn't they?" It is true that people will experience terrible feelings of sadness, loss and anxiety, and will struggle to cope, but most people do not develop a formal depressive illness. The sad thing is that depression is highly treatable, even when—as is so often the case with stroke—it is the direct result of organic brain damage. The problem is that once you have had a stroke, your chances of being referred to a specialist mental health service are somewhat less than if you were to experience the same problems without a stroke.
	Insufficient attention, too, is paid to the cognitive, perceptual and speech deficits we have heard so much about from the noble Lord, Lord Rodgers, and the noble Lord, Lord Clinton-Davis. There is such a lot that can be done in the early days and there are natural improvements that occur very quickly. But we must get appropriate and highly specialised rehabilitation into the field, especially mental health professionals such as treatment-orientated neuropsychologists and psychiatric nurses who understand cognitive problems in stroke and, as we have heard, some of the speech rehabilitation required. I fear that stroke services and psychiatric services are often so far removed from each other, geographically and philosophically, that this is unlikely to happen without central support and guidance.
	I would like to ask the Minister what the Government are doing to combat the ageism which is still endemic in hospital services, and which has led to this very poor situation. It is not only endemic in hospital services, but in medical research funding. The focus of research is very much determined by ageism. What numerical measures of outcomes will be introduced to ensure that the departmental strategy will work this time?

Baroness Barker: My Lords, I, too, pay tribute to my noble friend Lord Rodgers of Quarry Bank and to the noble Lord, Lord Clinton-Davis, for a most apt, elegant and eloquent introduction to a really serious subject. I declare an interest. Fortunately, I have not experienced a stroke, but I have answered the phone when the call has come to say that someone several hundred miles away who is very dear to me has had one. So I know a bit about it from that respect, and because of that experience, I have taken a particular interest. I have sat in A&E departments watching A&E doctors trying to make that FAST diagnosis in the middle of a very busy A&E ward.
	My noble friend Lord Rodgers has organised this debate in a timely fashion. Not only do we have the National Audit Office report from November 2005, we have the report of the Public Accounts Committee of 8 February 2006. Furthermore, we have Professor Ian Philp's report on the first five years of the implementation of the NSF for older people, which includes a standard on stroke care.
	Of all those documents, the most interesting and revealing issue to arise—from the NAO report—is the model of care adopted in Australia, where stroke is classified as a medical emergency and medical teams are organised to treat it as a fast stream disease. Were it to be replicated here, it would not only save patient lives, as has been said, but it would decrease the number of people who are left with dependencies and disabilities after a stroke. Moreover, that approach would save the NHS a great deal of money. That ought to be the key factor that the Government pay attention to.
	The national audit of stroke was due to start collecting data in April this year. Even without the benefit of that information, it is clear that there has been a great deal of improvement in stroke care over the past decade; not as much as there has been on chronic heart disease and cancer, but there has been less investment in stroke care. Between 1992 and 2002, stroke mortality declined by about 30 per cent in people aged under 75, but the chance of a stroke being fatal has remained constant at about 25 per cent. The average length of stay in an acute hospital bed has declined from 34 days to 28 days, but at any one time 20 per cent of acute beds are occupied by people who have had a stroke.
	The key problem is accurate diagnosis before a patient enters an acute hospital. The new GP contract specifies that people who have had strokes should be identified and treated within protocols agreed with specialists. Have those protocols been developed and implemented? Furthermore, do they include ambulance staff, who are often the people who spent time with stroke patients during the first few critical few hours? I am concerned because last week NHS Direct announced several thousand job losses. What impact will those cuts have on people who are trying to get information and make the sort of diagnosis that the noble Baroness, Lady Gardner of Parkes, talked about?
	Anyone who has had a stroke, or cares for someone who has had one, knows that agonising period when you wait to find out what type of episode has happened and what the consequences are likely to be; whether it is a blood clot or a cerebral haemorrhage. The NAO report identified that failure to have rapid access to a scan is a major cause of delay in treatment. The Public Accounts Committee report showed more clearly that it is not always about access to the machinery and the kit; it is about having access to the staff who have the capacity to understand and read the scans and to interpret the data. Where those staff are available in A&E departments, the whole care pathway becomes much faster and people get much quicker access to appropriate care. I say that from experience. It makes a huge difference when the scanning equipment and the staff are in the A&E department and there is quick access to DVT nurses, for example. I have experienced that at St George's when I have been accompanying people. It is part of its ground-breaking work on hypertension, and it proves the benefits of having an integrated care pathway.
	In evidence to the Public Accounts Committee, Professor Roger Boyle, National Director for Heart Disease at the Department of Health, referred to a stroke research network. Will the Minister give further details of that? How will it be organised and resourced? Will the development of the network be dependent on the support and involvement of PCTs and ambulance trusts as well as acute trusts? If so, will the current restructuring of PCTs and ambulance trusts delay or impede the network's development? Will it all be caught up in that magical, although frightening, phrase used by my noble friend Lord Rodgers of Quarry Bank—"service redesign"?
	I want to pick on one point in the report of the Public Accounts Committee. There was great discussion about the high incidence of strokes among certain communities—particularly the African-Caribbean population. I was struck that Professor Boyle reported that people from those communities appear to have a disposition towards high blood pressure and a higher resistance to treatment compared with other groups. Therefore, there is a far greater need to ensure that people in those communities are aware of the risks and that they take the sort of prophylactic action that the noble Baroness, Lady Rendell, talked about. Professor Boyle talked about the difficulty of reaching those communities. Has the department considered the extent to which it is possible to get messages to people through community networks and groups within those areas and to get specialists from the health service to work alongside the people and community groups there?
	Finally, I want to touch on the issue of rehabilitation. Anyone who has had a stroke—we have heard some tremendous examples this evening—or anyone who has cared for someone who has had a stroke will know that there is huge scope for recovery. People can relearn speech, regain mobility and learn new mechanisms for coping with the tasks of daily living, but that takes an awful lot longer than a six-week intermediate care package. It is possible to regain one's facilities and abilities to an extraordinary extent. Without that possibility, people would never be able to stand up and speak with the eloquence of the noble Lord, Lord Clinton-Davis, or my noble friend Lord Rodgers of Quarry Bank. But one of the most difficult things for people who have had a stroke is the ability to regain their confidence—confidence to stand up and speak; confidence to get on a bus; and confidence to have a bath when there is no one around in case they fall. It is possible to do that with time and help.
	One of the key points in effective rehabilitation in the future will be the extent to which specialists within the NHS are willing to share their knowledge with those of us who are amateurs but who have time. I once heard a gerontologist at a conference say that we know that in stroke rehabilitation going for a walk is extremely beneficial. Doctors and nurses do not have time to take people for walks. Volunteers and carers do have time but no one has ever told them that that is a good thing to do. Communication between professionals and those who will be there throughout the long period of regaining skills will be the key to the future management of this condition, which will affect many people.
	It is true that a stroke can be devastating, but it is equally true that great minds need not be damaged by a stroke. It is possible, with help, for someone who has had a stroke to lead a life which is a great example to others, and I thank my noble friend Lord Rodgers very much for the opportunity to make that clear.

Lord McColl of Dulwich: My Lords, I, too, congratulate the noble Lord, Lord Rodgers of Quarry Bank, on initiating this very timely debate. Noble Lords have already dealt with most aspects of stroke in a comprehensive and often moving way, so I shall focus on the mini-stroke, known as the transient ischaemic attack—TIA, having been put into Latin and Greek. "Ischaemic" means "holding back the blood", and this impairs the part of the brain supplied by the artery in question. The main arteries to the brain can become blocked by fatty deposits known as atheroma. "Atheroma" is Greek for porridge. It may be Greek porridge but it is certainly not like Scottish porridge.
	The surface of these bits of atheroma may become roughened and covered by platelets, which are responsible for clotting in the blood. These clumps of platelets may become detached and end up in a part of the brain which stops working for about 15 to 30 minutes. In any patient, the mini-stroke always tends to present in the same way: one patient may have transient weakness of the right arm; another may have transient weakness of the left arm; and another may lose his sight for 15 to 30 minutes.
	In order to shed light on the mechanisms of these transient attacks, the late Dr Knight of Guy's Hospital carried out an interesting experiment. He was an outstanding physician and an enthusiastic and inspiring teacher. He took his team of students and nurses to "Pooh Bridge" in Ashdown Forest, where Winnie the Pooh had carried out an important experiment about 100 years before. Standing on one side of the bridge, they dropped brightly painted cones into the water and established where they went. Of the 100 cones that were dropped, 31 per cent arrived at one destination and 23 per cent at another. That is a very good example of what happens in the brain. These clumps of platelets tend to arrive in the same part of the brain, causing the same set of symptoms in any particular patient. The treatment is simple: the patient is given a small dose of aspirin—an eighth of the normal dose—and that tends to reduce the amount of platelets adhering to the fatty deposits and so reduce the number of mini-strokes.
	As has been said already, there is a tendency to regard a stroke as an incurable problem of old age, and these people do not receive the attention that they require. It is possible to limit the damage done by strokes provided that an accurate diagnosis is made within the first few hours. There are enough scanners throughout the country to make this emergency scanning possible, but the problem is that in many hospitals the scanners are used for only eight hours a day. If you tell captains of industry about that, they are horrified. The idea that huge pieces of machinery should lie idle for most of the time is an anathema to them. Some hospitals use their scanners for 24 hours a day, instead of the usual eight hours. Noble Lords will be comforted to know that St Thomas's Hospital across the river has in the emergency department a scanner which is in use 24 hours a day. That is the way to do it.
	If, as has been mentioned, there is a simple blockage of an artery, that can be dissolved with the appropriate treatment. If, on the other hand, the stroke is due to a haemorrhage into the brain in substance, not a great deal can be done at that stage. But when the haemorrhage is outside the brain, just underneath its delicate covering—a so-called sub-arachnoid haemorrhage—emergency surgery is required if there has been a demonstrable rupture in the wall of the artery, which is called an aneurism. Although it is perfectly possible to arrange for everyone to have an emergency scan within three hours, as has been mentioned, there is a problem if we do not have sufficient staff to interpret the results, as the noble Baroness, Lady Barker, said.
	What could be the solution to that? The radiographers could easily be trained to interpret scans. Again, however, more resources are required to train them. Then, there is telemedicine, whereby scans can be transmitted to any part of the world and interpreted by experts. I spend my holidays working on a hospital ship in west Africa. We can spread a piece of tissue on a slide and put it into a machine called a Coolscope, which is a computerised microscope. The image can be beamed anywhere in the world. We beam ours to Bristol and get the answer back in five minutes. More of that needs to be done. My noble friend Lord Swinfen and his wife run a charity promoting telemedicine in many parts of the world.
	Our present mortality rate is too high, as has been mentioned; it is about 30 per cent. There is no reason why we cannot get it down to 15 per cent, as it is in many European countries and in north America, as the noble Baroness, Lady Murphy, emphasised.
	Then, there is the problem of rehabilitation. There is no doubt that rehabilitation services are not nearly as good as they should be and that many patients have felt isolated and neglected. They know only too well that if they had expert help they could return much more rapidly to as normal a life as possible.
	As the noble Lord, Lord Rodgers of Quarry Bank, pointed out, his stroke was not due to any fault in his lifestyle. However, many strokes are due to preventable conditions such as high blood pressure. I was interested to hear the noble Baroness, Lady Rendell, say that you can buy your own blood pressure machine and monitor your own blood pressure. It is easy to do, and it is very revealing. In between cases in my operating list at Guy's I went into an empty theatre, lay down on the table and wired myself up to the various monitors, including blood pressure and pulse. I then told myself to relax. You can talk to your blood pressure and bring the thing down. It is amazing. You have a measurement of your blood pressure, so you can see it. You can talk to it and teach yourself how to relax and reduce your blood pressure. I was amazed to see it come down to below 100 and the pulse below 50. I suddenly thought that if somebody came in and read those things, they would think that I needed resuscitation and probably do cardiac massage and break all my ribs. So I left the theatre rather rapidly. Those sorts of simple things are so important.
	Then, there is the question of obesity. We are what we eat. It is amazing how many extraordinary diets people try, including the Atkins diet and so on. At the end of the day, however, you are what you eat and if you eat less, you will lose weight. I had a patient—a man—who was very overweight. He tried everything but it had not worked. I noticed that his wife was nice and thin, so I suggested that he should try eating the same quantity of food as his wife ate. He did not like that idea very much. Three months later I asked his wife how things were going and she said, "He's the same weight but I'm putting on a lot of weight". He was obviously getting at her to eat more.
	Checking cholesterol levels and getting people to live a healthy lifestyle with plenty of exercise, avoiding smoking and excessive drinking of alcohol are other things that should be encouraged. Of course, we cannot force our views on patients. After all, we are simply advisers and in the end it is their choice.
	A patient said to his doctor, "Will I live longer if I stop smoking and drinking?". "No", said the doctor "but it will seem longer". That is not true but it is true that the number of strokes can be reduced if healthier lifestyles are encouraged.

Baroness Royall of Blaisdon: My Lords, I am truly grateful to the noble Lord, Lord Rodgers of Quarry Bank, for securing the debate and enabling us to discuss stroke services. The noble Lord speaks from great experience, sadly, but I particularly welcome his personal insight and all that I have learnt from his experience and courage, and that of my noble friend Lord Clinton-Davis.
	It is a significant time in the development of stroke services with the National Audit Office report bringing increased attention to the opportunities available, as well as the challenges to deliver high quality stroke services. Indeed, I think that the NAO report has acted as a healthy catalyst for change.
	Many noble Lords, including my noble friend Lady Rendell, asked why, given the scale of the problem, we have not done more to give stroke a higher priority. We should recognise that for too many years stroke was viewed as an inevitable part of getting old. We should recognise that it is only in recent years that experts have come to a consensus that much can be done to prevent and treat stroke. The growth of stroke medicine is a recent phenomenon and we welcome that.
	It is important to recognise the scale of the problem. Each year more than 110,000 people in England have a stroke. Every five minutes someone in the UK has a stroke. In England more than 900,000 people have had a stroke. It is expensive to treat and there are high costs to the wider economy through lack of productivity and informal care. I understand the concern expressed by noble Lords about the NAO report. It made 10 sets of recommendations for improving stroke prevention, treatment and care. I assure the noble Lord, Lord Rodgers, that the Department of Health is committed to taking all those recommendations forward. The comprehensive response will be through a new stroke strategy currently being developed with the help of six expert project groups chaired by leading figures in the stroke world.The department is also pursuing changes ahead of this strategy; for example, through a new toolkit developed for use by acute trusts which demonstrates the benefits of improved stroke care on an individual hospital basis.
	On prevention, the NAO recommended that there should be explicit references to stroke in the department's public health campaigns and that primary care trusts should ensure access to transient ischaemic attack services. The department has already included more on stroke in its websites, in campaigns such as "five-a-day", for example, which encourage the consumption of more fruit and vegetables, so that perhaps husbands and wives will both grow thinner. It also has a project group dedicated to making specific recommendations on public awareness raising and prevention issues. Indeed, this Friday, the department is running a workshop with a range of campaigning experts to produce a menu of ideas for taking this forward. There are already points available in the quality and outcomes framework for GPs about access to specialist outpatients services. Of course, they now have to monitor blood pressure on a more regular basis.
	In the White Paper Our health, our care, our say, the department is committed to making a life check for everybody at key life stages. The department is working to set up pilots to explore how these will be most effective. My noble friend Lady Rendell asked about the wider use of statins. NICE has recently produced guidance recommending that people with a 20 per cent risk of cardiovascular disease should be treated with statins. We are also considering recommendations from the National Screening Committee about improving the detection of cardiovascular disease and diabetes at an earlier stage.
	On the subject of GPs, the noble Baroness, Lady Barker, asked whether the Connect protocols have been implemented. Locally, yes; but not yet set out nationally. Project groups on TIA and emergency response will make recommendations in this area. The Royal College of Physicians' stroke guidance sets out what should happen, and the Department of Health accepts the need for a further push to ensure that it really does. The department's TIA project group meets this week to set out detailed recommendations for improving rapid access in every health community. The department is also funding a campaign run by the Stroke Association to raise awareness of stroke symptoms.
	My noble friend Lord Clinton-Davis spoke movingly of the need for a high standard of acute treatment of stroke and ensuring a rapid response, as did the noble Baroness, Lady Gardner of Parkes. The National Audit Office has recommended that NICE should produce guidance on delivering thrombolysis, that scanning capacity should be improved—including by providing training for stroke consultants in reading scans—and that access to stroke units should be improved. These recommendations are being taken forward through implementing the toolkit, detailed work with the professional bodies for radiologists and radiographers, and the work of a project group looking at acute care. NICE will produce guidance on managing acute stroke and an accompanying technology appraisal of alteplase, a clot-busting drug.
	On post-acute support, the NAO recommended that the quality requirements of the national service framework for long-term conditions should apply for stroke patients, and that the voluntary sector should be involved in working more closely with the Government. The principles and guidelines set out in the long term conditions NSF focus on patient-centred care for people with neurological conditions and are highly pertinent to stroke. Professor Ian Philp, the national clinical director for older people, has been promoting their use in stroke care, and the department will build on this through the developing strategy. Indeed, Professor Philp also has a programme of action under way to root out ageism in the NHS and ensure dignity for life.
	The voluntary sectors involved in stroke, to which I pay tribute and thank for their untiring work, including the Stroke Association, Different Strokes and Connect, already play a vital part in delivering services to stroke survivors; for example, in running conversation groups for people who experience speech problems after their stroke. Indeed, my own grandmother, who had a couple of strokes, recovered her speech when my daughter was a baby learning to speak. My grandmother had confidence to speak to my daughter, because she knew that she could practise her speech on her. They both learned to speak together. I am delighted that it worked well for both of them. All these voluntary groups are helping the department to frame the new strategy, and the contribution of the voluntary sector will be pivotal to implementing it successfully.
	The department has already, as recommended by the NAO, brought stroke within a new unified framework for vascular disease management, with an integrated policy team across heart disease, diabetes and stroke, and Dr Roger Boyle is now the national clinical director for both heart disease and stroke. We are looking, with the Healthcare Commission and the Royal College of Physicians, at the next steps for improving stroke audit, building on the excellent basis of the sentinel audit. Already, we have agreed that the use of the FAST—face weakness, arm weakness, speech problems test—stroke symptoms protocol should form part of the Healthcare Commission's assessment of ambulance trusts.
	We know what the challenges for stroke services are; the NAO report brought them clearly into focus. For example, not enough people really understand what a stroke is or would recognise the symptoms, as noble Lords have said. The noble Lord, Lord Rodgers of Quarry Bank, and my noble friend Lady Rendell were absolutely right about the need for better communication on the realities of stroke, a point that the noble Baroness, Lady Gardner, also made graphically.
	The Stroke Association has recently been allocated a Section 64 grant to assist with communication. Its campaign, entitled "Stroke is a medical emergency", urges people to know the warning signs. We fully support its excellent work but we need to make more efforts to explain that a stroke is a brain attack that needs urgent medical attention. We need to ensure that people who experience a mini-stroke seek help straight away rather than risk a really serious stroke later, and that the people with them understand what is happening and how best they can help them.
	Too many patients are not getting the scans they need as a matter of urgency, as many noble Lords have said. Although progress has been made, many patients still spend less than half their stay in hospital on a stroke unit, and the services are not always there to support patients and their carers when they leave hospital. Much has been said about rehabilitation, about which much more needs to be done.
	The noble Lord, Lord McColl of Dulwich, will be glad to know that the department is developing a picture archiving and communications system (PACS), which will be rolled out by spring 2007 and will provide opportunities to read scans remotely—rather like what he is doing on his Mercy Ships. Stroke scanning is complex; no one form of scanning provides perfect results. As many noble Lords have said, we must ensure that the appropriate individuals are available to interpret the scans. That is why the Department of Health will include training for a range of professionals as part of the stroke strategy framework that we are developing. Safe delivery of thrombolysis will be supported by NICE guidance on the management of acute stroke and its forthcoming technology appraisal of alteplase, a thrombolytic, or clot-busting, drug. It will give the NHS a clear steer in the interim, building on the existing guidance from the Royal College of Physicians.
	The White Paper that we published at the end of January addresses many of the issues faced by stroke patients. It aims to ensure that services are integrated and built around the needs of individuals, with more services delivered in the community or at home. It includes a new deal for carers, a commitment to integrated care plans and a range of measures to ensure that health and social services work more closely together. We must also ensure that those integrated services also address depression.
	On 1 March we held a national stroke conference, attended by more than 150 people, who will begin developing a new stroke strategy. We demonstrated the toolkit that I mentioned earlier, which brings together the key actions that hospitals can take. It calculates the benefits that taking certain actions can lead to for patients and the hospital itself. It also provides examples of teams that have been through radical change and how they went about it. For example, the Royal Free Hospital used to have one of the worst performing stroke services in the country, but in five years it turned that around and in the 2004 audit it was the best in the country. I understand, therefore, the specific concern that the noble Lord, Lord Rodgers, expressed about deficits at the Royal Free Hospital. I am pleased to say that one of its stroke doctors is working with the Department of Health on its hospital care project group. That doctor will be very happy to speak to the noble Lord, Lord Rodgers, to give him a more detailed briefing about the planned service developments at the Royal Free Hospital and more widely. I will seek to ensure that that happens soon.
	The noble Baroness, Lady Barker, asked about the UK Stroke Research Network. Apparently, we are giving £20 million over five years to the network, which is headed by Professor Gary Ford, a stroke physician in Newcastle who has trail-blazed thrombolysis, and who will oversee the local research networks. The network is at the very beginning of its exciting work, and I will be very happy to provide noble Lords with further details on it.
	The noble Baroness, Lady Barker, also asked whether restructuring of PCTs would delay developments. The department is absolutely determined that it will not. We will do our utmost to ensure that services are not disrupted in any shape or form, but if noble Lords find that they are disrupted, I am sure that we will be pleased to hear of those instances.
	I have described today just a few of the steps that we have taken in what will be a sustained and co-ordinated approach to improving stroke services. The challenge now is to spread this nationally so that all patients can benefit. We have a lot of hard work ahead of us, but I am confident that we can produce a comprehensive and effective strategy for delivering real improvements in stroke services.
	My noble friend Lord Clinton-Davis said that we needed to keep the Government on their feet. I am confident that debates such as this will indeed keep the Government on their feet and act as a catalyst to enable them to deliver even more changes.